& Summary Financial Statement

For the year ended 31 January 2014

Annual ReviewScottish Building Society

TABLE OF CONTENTS

Chairman's Report 1

Group Key Results 3

Chief Executive's Review 4

Summary Financial Statement, including 6

- Summary Directors' Report 6

- Summary of Key Financial Results & Ratios 10

- Statement of the Independent Auditor 11

Directors' Remuneration Report 12

Board of Directors 14

Summary Corporate Governance Report 16

Proposed Alterations to the Rules 18

Society Locations 19

CHAIRMAN'S REPORT

Overview This has been a busy year for the Scottish Building Society. The integration of the Century Building Society has been successfully achieved, and we welcome all our new members. Gerry Kay, who had served as the Society's Chief Executive for 5½ years, left the Society with our best wishes and thanks for his hard work over those years. He was replaced by Mark Thomson, who came to the Society as Chief Operating Officer and has over 30 years' experience in banking, and lending in particular, most recently with Scottish Widows Bank. He brings a wide knowledge of the savings and mortgage markets, and a strong understanding of the principles of mutuality.

Financial Position The Society has had a good financial year, despite the ongoing challenging market conditions. We have now seen a period of 5 years with record low Bank Base rates, high, but now falling, inflation, weak wage growth and a resultant squeeze on household incomes. Whilst there are signs of recovery

and optimism in the UK economy, the Eurozone was still in recession for much of the year and although the acute issues appear to be over, Europe and the Euro are not entirely out of trouble. There are also reports of increasing house prices and an increase in activity in the housing market, partly attributed to the various Government schemes aimed at supporting this area of the economy.

Whilst governments urge their banks and building societies to increase lending to support the economy, these organisations have little room to move with enhanced capital adequacy rules meaning they need to hold more capital against the loans they write, and such an environment is not compatible with growth in net new lending.

That said the Society's capital ratios remain high by reference to both our peer group and the higher minimum levels of capital expected to be required by the regulators. Profitability has improved and we have high levels of liquidity and capital, which stand us in good stead for continued lending notwithstanding the challenging banking environment.

Although low interest rates have had obvious benefits for mortgage holders, savers are experiencing the pain of this prolonged period of low rates. Most economists suggest that the Bank Base rate is unlikely to increase until 2015 at the earliest. At Scottish Building Society, we are very conscious that the balance of providing competitive mortgage rates and savers rates is something which requires constant attention.

Products Your management team has spent time this year simplifying our product range. We believe that simplification of both savings and mortgage products is important for our existing members and for attracting new members. We are currently reviewing all of our mortgage and savings products to ensure that the rates are fair and comparable, that we have no 'teaser' rates on savings products which drop to lower rates at a later date, and that any conditions attaching to mortgages or savings products are transparent and easily understandable.

Member Communication Member communication and feedback is very important to us. We are in the process of redeveloping our regular newsletter and also look forward, at our AGM in Perth in May, to meeting as many members as are able to attend. For those members who cannot be present, we will continue the practice of asking for your questions prior to the AGM, and will endeavour to answer as many of those questions at the meeting as is practical. It has been our practice to take the AGM around Scotland and this year will be our first year in Perth. We hope very much to see a large audience there. In addition to this we would encourage you to raise any questions, issues and concerns that you may have, either as part of the postal or online voting process or by emailing your question to agmquestion@scotbs.co.uk.

1

CHAIRMAN'S REPORT (continued)

Regulation As mentioned above, regulation of the financial services industry has understandably been tightened over recent years with increased capital requirements being simply one of a number of new consequences of the review. An important regulatory development for us is the outcome of the regulator’s Mortgage Market Review (MMR) coming in to effect in April 2014. These impose significant additional responsibility on all lenders to ensure borrower "affordability" of mortgage products - in simple terms lenders have a higher burden of responsibility in assessing a mortgage applicant’s ability to service a mortgage rather than relying on a borrower undertaking. The Society's underwriting approach, which requires a file-by-file review of applications as opposed to the "credit scoring" process used by many larger lenders, means that we are very well placed to comply with the MMR requirements without having to significantly change the way we conduct our business.

Regulatory compliance continues to take up a great deal of resource for all organisations affected. During 2013, the Financial Services Authority was split into two separate organisations, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). Whilst this split makes clear organisational sense in terms of division of responsibilities, there is an inevitable period of duplication in the short term as both the regulatory bodies and those institutions being regulated bed down the new working model. These challenges are of course compounded by the ongoing changing regulatory landscape. However, our members can rest assured that the management team and Board dedicate considerable time to ensuring a close and well-functioning relationship with our regulatory interfaces and compliance with our regulatory obligations.

Management Team The management team under the new Chief Executive is working hard to continue to provide excellent customer service. I would like to take this opportunity to thank them for their hard work and support and to the Board for their commitment and guidance.

Looking Forward As I mentioned, there are signs of recovery, and with a financially strong Society and a strong management team under the guidance of Mark Thomson, the Society is well placed to continue to provide the mortgage and savings products which the market requires. The Board is confident that the Society can continue to remain independent, retain its mutual status, and deal with any issues which may arise following the independence vote later this year.

Alexa H Henderson Chairman 26 March 2014

2

GROUP KEY RESULTS for the year ended 31 January 2014

Total Assets

Mortgage Balances

Savings Balances

Net Interest Margin %

2010 1.64%

2011 1.56%

2012 1.73%

2013 1.65%

2014 1.71%

2010 £259.5m

2011 £290.0m

2012 £271.6m

2013 £343.9m

2014 £360.1m

2010 £241.0m

2011 £236.0m

2012 £257.7m

2013 £276.7m

2014 £275.4m

2010 £327.1m

2011 £333.1m

2012 £342.7m

2013 £387.8m

2014 £397.2m

Total Assets

£397.2million

Liquid Assets

£119.2million

Profit Before Tax (excluding exceptional items)

£1.6million

3

CHIEF EXECUTIVE’S REVIEW

Our Performance I am delighted to report that your Society had another good year, with our profit before tax and exceptional items 60% ahead of the previous year at £1,559,000 (2013: £973,000). Our retained profit, which further strengthens our reserves, was also up on last year.

The financial year 2013/14 was a period that saw a number of changes to your Society, starting in February 2013 with our merger with Century Building Society, when we welcomed around 3,000 members to our enlarged Society; my appointment as Chief Executive in May; and the successful delivery of a major technology project in the autumn to upgrade our IT and telephone infrastructure, which delivers flexibility to our operational model and enhances our ‘business continuity’ capability.

Despite being a period of change, I am pleased to advise that customer service remains a priority, and was the main driver towards an enhancement in our organisational structure, which now places responsibility for the provision of excellent customer service under one senior manager.

Apart from my own change of role, our Senior Management Team is largely unchanged, except for the addition of Andrew Moses into the role of Head of Operations and Lending. Andrew has over 25 years of highly relevant experience, and is a welcome addition to my Senior Management Team.

Mortgages Lending on residential property by raising funds from individual savers remains at the heart of your Society’s straightforward business model, and our gross lending this year amounted to £23.6m (2013: 52.4m), with overall net lending remaining flat.

Throughout 2013, the residential property market in Scotland was largely subdued, with many lenders generally competing for a limited amount of business. Besides our desire to only lend to credit-worthy individuals, we do not believe it is in your Society’s best interests to compete for this business at a price that does not add value. We have, however, been working to simplify our range of mortgage products, and to make the Society easier to deal with, as part of our continuous improvement initiative.

Our competitive strength in mortgages is based upon our traditional approach to lending, where each application is individually assessed by an experienced professional. This means we can often assist applicants whose circumstances do not fit the computerised processing requirements employed by larger lenders.

Individual assessment and prudent lending policies also contribute to the high quality of our mortgage lending and consistently low levels of arrears. At the year-end only 0.41% (2013: 0.61%) of mortgages which were on our books at the beginning of the Financial Year were three months or more in arrears. (This figure, once Century mortgages are included, increases to 1.29%.)

Savings I fully understand that the current low interest rate environment, which seems likely to continue for a while longer, makes it very difficult for savers to achieve real returns on their investments. It is of course essential for the Society to earn a margin between savings and mortgage lending in order to maintain our strength, and we therefore work hard to achieve a fair balance between the interests of our savers and mortgage borrowers.

While we remain committed to providing our members with the best possible deal, we have, throughout the last year, been working towards an exercise to simplify our product range and to bring our rates across a number of like products into line. This exercise has also been designed to provide our members with a wider range of investment products than we have been able to offer recently, including ‘Member-Only’ offerings as a reward for your loyalty to the Society.

4

CHIEF EXECUTIVE’S REVIEW (continued)

The Year Ahead As a Society that wishes to treat its members fairly and consistently throughout their relationship with us, we remain committed to providing our members, whether savers or borrowers, with good value products and an excellent level of customer service. We will continue to seek operating efficiencies through our programme of continuous improvement and technology enhancement, and will be seeking regular feedback on what matters most to our members.

We expect the environment to remain challenging, but firmly believe that your Society and its highly committed staff are well placed to compete and achieve further success.

Mark L Thomson Chief Executive 26 March 2014

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SUMMARY FINANCIAL STATEMENT for the year ended 31 January 2014

This financial statement is a summary of information in the audited Annual Accounts, the Directors’ Report and Annual Business Statement, all of which will be available to members and depositors free of charge on request at every office of Scottish Building Society from 30 April 2014 or available to read or download from our website www.scottishbs.co.uk from the same date.

SUMMARY DIRECTORS' REPORT Our Mission, Vision and Values Statements The Society's Mission Statement is that "we aim to be the Building Society of choice for every stage in life".

Our Vision is "to remain Scottish, Independent and Mutual, providing a first class service and quality products for all members".

The values of the Scottish Building Society are:

To provide professional and friendly service and to be clear and straightforward in all our communications with our members, who are both our customers and the owners of the business.

To operate in accordance with the highest standards of integrity and transparency in all relationships with members, business partners and regulators.

To earn the respect and trust of our members and to be socially responsible in everything we do. To maintain the Society's financial strength and stability and aim to be as cost-effective as possible.

Business Review The Business Review is covered in the Chairman's Report and Chief Executive's Review on pages 1 to 5.

Profit and Capital Profit for the year before tax excluding the exceptional expenditure of the Financial Services Compensation Scheme (FSCS) levy and merger costs amounted to £1,559,000 compared with £973,000 in 2012-13. This is a strong performance in a difficult market environment, and further strengthens our reserves as a platform for future growth and the provision of member benefit. Gross capital and free capital as a percentage of shares and borrowings stood at 7.7% and 7.2% respectively at 31 January 2014. This is comparable with other building societies of a similar size to ourselves.

The Society is required to set out its capital position, risk exposures and risk assessment processes in its Pillar 3 disclosures document which is available on the Society's website or from the Secretary of the Society.

Liquidity Total cash and investments at 31 January 2014 amounted to £119.2million which represented 32.5% of total shares and borrowings, which compares with £108.7million (30.2%) at 31 January 2013. The Society’s continuing aim is to maintain an appropriate level of liquidity at all times, in accordance with prudent management and regulatory requirements.

Interest Rates The Bank of England base rate fell to an unprecedented 0.50% in March 2009. It has remained at that historical low since that date and there remains (at the time of writing) no firm indication as to when rates might start to rise again. As a result the Society's Standard Variable Rate for mortgages has remained unchanged at 5.29% throughout the financial year and there have also been no global changes to variable savings rates (although there have been some changes to individual mortgage and savings products to reflect market conditions).

The Society’s long-term goal continues to be to generate member value through efficient and prudent management and a process to harmonise and simplify savings products has been initiated which will result (when completed) in a clear, simple range of products where all accounts on the same terms will receive the same rate of interest.

Mortgage Arrears and Forbearance At 31 January 2014 the Group had only eleven mortgage accounts in arrears for 12 months or more (2013: four). The total arrears outstanding on these accounts was £142,748 (2013: £63,393) and the aggregate capital balance was £1,255,221 (2013: £627,737). Five properties had to be taken into possession during the year (2013: two).

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SUMMARY FINANCIAL STATEMENT for the year ended 31 January 2014 (continued)

SUMMARY DIRECTORS' REPORT (continued) The Society uses a number of forbearance measures to assist those borrowers who are, or could be, approaching a point of experiencing financial difficulty. Such measures include agreeing a temporary payment concession in order to reduce the borrowers’ financial pressures. We expect borrowers to resume normal payments once they become able to do so. As at 31 January 2014 there were 74 cases benefiting from the Society’s forbearance measures with total outstanding capital balances of £5.7million. The Society makes provisions for any expected loss resulting from accounts in arrears in accordance with the Board approved policy.

Key Performance Indicators The Board and management monitor a range of performance indicators to assess the ongoing health of the Society. The financial indicators are shown in the table below – and some are also shown graphically on page 3. Their significance is explained as: Total Assets: These have increased by 2.4%, primarily due to the lower levels of lending during the year. Mortgage Assets: One of the key reasons for the Society's existence is to promote home ownership; this year mortgage assets have remained relatively unchanged due to the subdued market in Scotland. Share Balances: Another key reason for the Society's existence: to encourage saving and investment. Savings balances have increased by 4.7% this year. Reserves: The accumulated profits of the Society over more than 165 years of operation, which provide the capital which helps to maintain the Society's financial strength. Net Interest Margin: The income generated by the Society from its operations, expressed as a percentage of mean total assets. Liquidity: Total cash and investments held by the Society at the year-end, expressed as a percentage of shares and borrowings. Gross Capital: This ratio is expressed as a percentage of shares and borrowings and demonstrates the relationship between the Society's capital and its liabilities to investors. It reflects the continuing strength of the Society whilst remaining well within prudent guidelines. Asset Growth: The annual increase in the Society's assets shown as a percentage.

Group Key Financial Performance Indicators 2010-2014

2010 2011 2012 2013 2014

Total Assets £327.1m £333.1m £342.7m £387.8m £397.2m

Mortgage Assets £241.0m £236.0m £257.7m £276.7m £275.4m

Share Balances £259.5m £290.0m £271.6m £343.9m £360.1m

Reserves £24.9m £25.4m £26.0m £26.5m £28.3m

Net Interest Margin 1.64% 1.56% 1.73% 1.65% 1.71%

Liquidity 27.9% 31.0% 26.3% 30.2% 32.4%

Gross Capital 8.3% 8.3% 8.2% 7.4% 7.7%

Asset Growth 10.6% 1.8% 2.9% 13.2% 2.4%

Non-Financial Key Performance Indicators The Board also monitors a number of other indicators on a regular basis. Amongst these, it is pleasing to report that: • 80% of mortgage borrowers reaching the end of their initial incentive period have remained with the Society. • Customer complaints remain extremely low, with only 44 formal complaints registered during the year, 95% of

which were resolved within four weeks of receipt. • Less than 2% of mortgage accounts have arrears greater than 1.5% of their mortgage balance. • Overall membership numbers have increased during the year.

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SUMMARY FINANCIAL STATEMENT for the year ended 31 January 2014 (continued)

SUMMARY DIRECTORS' REPORT (continued) Regulation and Compliance The past year has seen further regulatory changes. In April 2013 the Financial Services Authority (FSA) was replaced by two new regulators, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The Society is now regulated by two separate bodies.

As highlighted last year, the FSA issued revised rules arising from its Mortgage Market Review which will come into force in April 2014. The Society, along with the rest of the mortgage industry, has therefore been working hard to prepare for these new rules and we are well-placed to ensure that our existing and future customers benefit from these changes. The EU Mortgage Credit Directive has recently come into force and this will mean further changes for the mortgage industry over the next two years.

The Society is required to have regard to the principles laid down in the UK Corporate Governance Code. This is covered in more detail in the separate Summary Corporate Governance Report on pages 16 & 17.

Scottish Independence Referendum The Board takes the view that the Society should remain neutral in the ongoing debate about Scottish Independence, as it will be Scotland’s people who will decide the country’s future. Whatever the outcome of the September vote, the Society will continue to act in the best interests of our members. The detailed implications for savers and borrowers remain unclear at the present time as – in the event of a ‘Yes’ vote – much will depend on the outcome of post-referendum negotiations on topics such as currency, financial regulation and EU membership.

Corporate Social Responsibility (CSR) The Society recognises that CSR is concerned with how businesses take account of the social, environmental and economic impacts of their operations. We seek to be a good corporate citizen in all aspects of our operations and activities and aim to be recognised as a socially responsible business by our members, our staff and the communities in which we operate. This is articulated in our Corporate Social Responsibility Policy.

Customer Service and Conduct of Business

The Society is committed to treating its members fairly and to acting with honesty and integrity in its relationships with members, regulators and the wider community. Continuous review and improvement is used to build on the high level of service throughout the Society and the many positive aspects already in place, as outlined in the Chief Executive's Review.

Donations and Community Support

The Society continues to provide support for local events in areas around its branches, and is looking to further develop its community involvement during the coming years.

Charitable donations are made to reflect and encourage members' participation in the Society’s Annual General Meetings each year. The 2013 AGM was held at the Scottish National Gallery in Edinburgh and £500 was donated to the Scottish Wildlife Trust for members attending in person and £1,600 was donated to Carers Scotland for postal and online votes received.

The 2014 AGM will be held at the Royal George Hotel in Perth on 28 May and a donation will be made to Diabetes UK Scotland for every voting member attending and for every postal and online vote received.

There were no donations for political purposes.

Environmental Issues

The Society aims to minimise the environmental impacts of all our operations by striving to reduce unnecessary consumption, to re-use and recycle where possible, to manage energy usage wisely and to promote the control of environmental issues at all levels. We continue to use paper from sources approved by the Forestry Stewardship Council wherever possible, to recycle waste paper and other materials and to encourage our staff to be environmentally aware at all times.

Following the successful introduction of online voting facilities, we also intend to reduce our impact on the environment in the future by allowing members to opt to receive future AGM packs electronically.

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SUMMARY FINANCIAL STATEMENT for the year ended 31 January 2014 (continued)

SUMMARY DIRECTORS' REPORT (continued) Merger with Century Building Society The merger with Century Building Society took effect on 1 February 2013. The customer and accounts data from Century was successfully integrated into the Society’s main computer systems very quickly and changes have been made to interest capitalisation and charging dates during this year to bring Century heritage accounts into line with the Society’s operating processes.

The Directors are pleased to welcome former Century members as members of the enlarged Society.

Technology The Society has completed an extensive upgrade to its computer and telephone systems during the year. These changes provide a firm foundation for greater flexibility and other improvements in working processes and also help to ensure better business continuity provision.

Staff and Agents The Directors recognise the contribution that staff at all levels make to the continuing success of the Society and would once again like to record their appreciation for the efforts made by everyone, particularly in what has been another very busy and challenging year.

The Directors also wish to acknowledge the assistance provided by our agency network that enables the Society to offer a counter service to members throughout Scotland, particularly in rural areas.

Election of Directors Raymond Abbott and John Ogston were co-opted to the Board during the year and are retiring in accordance with Rule 25(4).

Where an individual has been a Director for more than nine years, the Society's policy is that they should seek re-election by the members at least every two years, after having been assessed by the Board as continuing to be independent in character and judgement. Alexa Henderson was first appointed to the Board in 2001 and last stood for re-election in 2012.

Under Rule 26 any Director who has not been elected or re-elected at either of the last two Annual General Meetings must retire from office and seek re-election. This year Moira Sibbald is retiring under Rule 26, having last been re-elected in 2011.

Being eligible under the Rules, all of the above offer themselves for election/re-election.

Post Balance Sheet Events The Directors do not consider that there have been any events since the year-end that have a material effect on the financial position of the Society.

Auditor Following a review of their corporate structure, our auditor, KPMG Audit Plc, has instigated an orderly wind down of its business, with future audit work being undertaken by KPMG LLP. The Board has decided to put KPMG LLP forward to be appointed as auditors and a resolution for their appointment will be proposed for consideration at the Annual General Meeting to be held on 28 May 2014.

There is no difference in liability terms between KPMG Audit Plc and KPMG LLP.

By order of the Board Andrew J W Tristram Secretary 26 March 2014

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SUMMARY FINANCIAL STATEMENT for the year ended 31 January 2014 (continued)

SUMMARY OF KEY FINANCIAL RESULTS

GROUP RESULTS FOR THE YEAR 2014 2013 £000 £000

Net interest receivable 6,722 6,010

Other income and charges (150) (125) Administrative expenses (4,970) (4,862) Provisions for bad and doubtful debts (43) (50)

Operating profit before FSCS levy and merger costs 1,559 973 Provision for FSCS levy (258) (187) Merger costs (235) -

Profit for the year before taxation 1,066 786 Taxation (47) (204) Profit for the year 1,019 582

GROUP FINANCIAL POSITION AT END OF YEAR

ASSETS

Liquid Assets 119,163 108,653 Mortgages 275,384 276,662 Fixed and Other Assets 2,685 2,480 Total Assets 397,232 387,795 LIABILITIES

Shares 360,085 343,877 Borrowings 7,098 15,593 Other Liabilities 1,760 1,789 Reserves 28,289 26,536 Total Liabilities 397,232 387,795

SUMMARY OF KEY FINANCIAL RATIOS

2014 2013 % %

Gross capital as percentage of Shares & borrowings 7.70 7.38

Liquid assets as percentage of Shares & borrowings 32.45 30.23

Profit for the year as percentage of mean total assets 0.26 0.16

Profit for the year (excluding FSCS levy and merger costs) as percentage of mean total assets

0.32

0.20

Management expenses as percentage of mean total assets 1.27 1.33

The Summary Financial Statement is prepared on a Group basis.

The gross capital ratio measures the proportion which general reserves bear to liabilities (ie holders of shares and deposits). Capital consists of the profits accumulated by the Group over more than 160 years which represents continuing financial security for members and substantial protection from adverse market conditions in the future.

The liquid assets ratio measures the proportion of the Group’s shares and borrowings which are held in the form of cash, short-term deposits and securities readily realisable into cash. Liquid assets are maintained at an appropriate level to meet investors’ withdrawals from their accounts, to make new mortgage loans and to fund general business activities.

The profit/assets ratio measures the proportion which the profit after taxation for the year bears to the average balance of the assets held during the year. A society needs to make a reasonable level of profit each year in order to maintain a strong gross capital ratio thereby protecting investors’ funds. The Directors believe the profit for the year is consistent with the aims of mutuality.

The ratio of management expenses to mean total assets measures the proportion which the Group’s administrative expenses (including depreciation and amortisation) bears to the average of the Group’s total assets at the start and end of the year.

Approved by the Board of Directors on 26 March 2014.

Alexa H Henderson Robert Golbourn Mark L Thomson Chairman Vice Chairman Chief Executive

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STATEMENT OF THE INDEPENDENT AUDITOR TO THE MEMBERS & DEPOSITORS OF SCOTTISH BUILDING SOCIETY We have examined the Summary Financial Statement of Scottish Building Society for the year ended 31 January 2014 set out on pages 6 to 10.

This auditor's statement is made solely to the Society’s members, as a body, and to the Society’s depositors, as a body, in accordance with Section 76 of the Building Societies Act 1986. Our work has been undertaken so that we might state to the Society’s members and depositors those matters we are required to state to them in such a statement and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Society and the Society’s members as a body and the Society’s depositors as a body, for our work, for this statement, or for the opinions we have formed.

Respective responsibilities of Directors and Auditor The Directors are responsible for preparing the Summary Financial Statement within the Annual Review & Summary Financial Statement in accordance with applicable UK law.

Our responsibility is to report to you our opinion on the consistency of the Summary Financial Statement within the Annual Review & Summary Financial Statement with the full Annual Accounts, Annual Business Statement and Directors’ Report and its conformity with the relevant requirements of Section 76 of the Building Societies Act 1986 and regulations made under it.

We also read the other information contained in the Annual Review and Summary Financial Statement and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the summary financial statement.

Basis of opinion We conducted our work in accordance with Bulletin 2008/3 'The Auditor's Statement on the Summary Financial Statement in the United Kingdom' issued by the Auditing Practices Board. Our report on the Group’s full Annual Accounts describes the basis of our opinions on those Annual Accounts, the Annual Business Statement and the Directors' Report.

Opinion on Summary Financial Statement In our opinion the Summary Financial Statement is consistent with the full Annual Accounts, the Annual Business Statement and Directors’ Report of Scottish Building Society for the year ended 31 January 2014 and conforms with the applicable requirements of Section 76 of the Building Societies Act 1986 and regulations made under it.

Catherine Burnet for and on behalf of KPMG Audit Plc, Statutory Auditor Chartered Accountants 20 Castle Terrace Edinburgh 26 March 2014

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DIRECTORS' REMUNERATION REPORT for the year ended 31 January 2014

The purpose of this report is to inform members of the Society, in line with the relevant provisions of the UK Corporate Governance Code, of the policy for determining the remuneration of Executive and Non-Executive Directors. The Society has adopted a Remuneration Policy which meets the applicable requirements of the Remuneration Code issued by the financial services regulator.

A statement of all Directors' Remuneration is included within this report. An advisory vote on Directors' Remuneration is included in the AGM agenda.

As a mutual organisation, the Society has no share option scheme and none of the Directors has any beneficial interest in, or any rights to subscribe for, shares in or debentures of any connected undertaking of the Society.

Procedure for Developing Policy on Executive and Individual Director Remuneration The Board has overall responsibility for overseeing arrangements for remuneration. This is done through the Nomination & Remuneration Committee, which is chaired by the Senior Independent Director. All Non-Executive Directors are members of the Committee and the Chief Executive attends meetings and acts as secretary of the Committee but takes no part in discussions on his own remuneration.

The Committee reviews remuneration for Directors and staff annually, using data from comparable organisations and taking advice from external consultants when appropriate.

Non-Executive Directors The level of fees payable to Non-Executive Directors is assessed annually using market information and data from comparable organisations. The fees payable to the Chairman and Vice-Chairman reflect the additional responsibilities of these positions.

Fees for Non-Executive Directors are non-pensionable and Non-Executive Directors do not participate in any bonus or incentive schemes or receive any other benefits other than reimbursement of expenses incurred in the execution of their duties as Directors.

Executive Director The Chief Executive’s basic salary is reviewed annually by reference to jobs carrying similar responsibilities in comparable organisations and by reference to market conditions and personal performance.

His contract with the Society includes a non-pensionable executive bonus scheme which is payable dependant on the Society's performance and the individual's personal performance measured against pre-agreed objectives. For Society performance there are a number of key measures set by the Board – including membership numbers, net lending and savings targets, arrears management, risk management and compliance with regulations – all of which are to be achieved within a specified set of financial ratios. The Board also sets four or five individual objectives against which the individual is assessed for personal performance. No single factor can therefore unduly influence the amount of bonus payable.

Bonus payments to the Chief Executive are not guaranteed and are reviewed each year.

The Society makes a minimum contribution of 20% of salary to the Chief Executive’s private pension arrangements and he also receives a further taxable benefit comprising a Society car.

Service Contracts The Chief Executive has a service contract with the Society which can be terminated by either side giving six months’ notice.

Non-Executive Directors do not have service contracts but serve under letters of appointment subject to election by the Society's members.

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DIRECTORS' REMUNERATION REPORT for the year ended 31 January 2014 (continued)

Non-Executive Directors

Fees only

To 31 January 2014 To 31 January 2013

R J Abbott (appointed 1 June 2013) £13,333 -

D W P Chalmers (retired 28 May 2013) £6,087 £17,900

G B Clark (retired 28 May 2013) £6,087 £17,900

R Golbourn £23,157 £21,050

A H Henderson £31,567 £28,150

J C Ogston (appointed 1 July 2013) £11,667 -

D Peebles £19,420 £17,900

M R Sibbald £19,420 £17,900

Total £130,738 £120,800

The fees shown for Mr Ogston were paid through a third-party service company.

Executive Directors

To 31 January 2014

Salary Bonus Pension Contributions

Taxable Benefits

Total

G J Kay (resigned 30/4/2013) £25,950 - £5,839 £2,122 £33,911

M L Thomson £97,400 £11,500 £19,080 £6,367 £134,347

Total 2014 £123,350 £11,500 £24,919 £8,489 £168,258

Mr Kay also received a final contractual payment on his resignation as Chief Executive amounting to £122,393.

To 31 January 2013

G J Kay £101,800 £17,095 £22,905 £8,232 £150,032

M L Thomson (appointed Director 12/10/2012)

£68,750 - £14,000 - £82,750

J B Dunn (resigned 2/3/2012) £5,596 - £1,119 £1,784 £8,499

Total 2013 £176,146 £17,095 £38,024 £10,016 £241,281

All pension contributions paid by the Society were in respect of money-purchase pension schemes.

Robert Golbourn Chairman, Nomination & Remuneration Committee 26 March 2014

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BOARD OF DIRECTORS

Alexa Henderson qualified as a Chartered Accountant and worked with KPMG and Arthur Andersen in Edinburgh and Melbourne, primarily in financial services audit. On returning to Edinburgh she joined the WM Company, provider of information services to investment funds. As a past Director of the WM Company, previously a Bankers Trust then Deutsche Bank subsidiary, and as Trustee of their company pension scheme, Alexa has experience in investment, compliance, financial and general management which she brings to the board of Scottish Building Society. She is also involved in the Stewart Ivory Financial Education initiative to raise financial awareness amongst young people. Alexa was appointed to the Board of Adam & Company during 2012 and chairs their Audit Committee. Alexa joined the Society’s Board in 2001 and has chaired the Audit Committee, the Assets, Liabilities & Planning Committee and has also been Vice-Chair of the ALCO and the Board itself. She was appointed as Society Chairman in June 2011.

Robert Golbourn joined the Board in 2006 and is currently Vice-Chairman, Senior Independent Director and Chairman of the Credit Committee, having previously been Chairman of the Audit Committee from 2007 to 2011. He is a Fellow and former Member of Council of the Chartered Institute of Bankers in Scotland. He spent 30 years with Clydesdale Bank, in various management positions and later in senior roles including Regional Manager, Treasurer and Head of Credit. In 1994 he joined Scottish Widows, then an independent mutual, to set up a new banking subsidiary which grew to become a well-established operator in the direct and intermediary markets. He retired as Managing Director of Scottish Widows Bank in 2003. Rob keeps well up to date with financial sector issues through a wide network of contacts established throughout his career.

Moira Sibbald has been the Legal Counsel & Group Company Secretary of the CALA Group Ltd, a residential property developer with operations in Scotland and England, since 2001. Prior to that her career had developed from private practice in Edinburgh as a solicitor specialising in commercial property to her appointment as a General Manager within a building society having responsibility at various times for mortgage and investment administration, compliance, governance, HR and customer service. Previously Moira has been a non-executive director of an arts charity and of a large Scottish based Housing Association. She also has experience as a pension trustee. Her wide experience in property and financial services strengthens the Board’s expertise in the property market, customer service, risk, corporate governance and legal and compliance matters. Moira joined the Board in 2008 and currently chairs the Audit Committee.

David Peebles joined the Board in 2006 and is currently Chairman of the Assets & Liabilities Committee. He is a Fellow of the Chartered Institute of Bankers in Scotland and a Chartered Banker. He has a Postgraduate Diploma and a Masters Degree in Marketing and is also a member of the Association of Corporate Treasurers. As a former bank Treasurer he has an in-depth knowledge of Risk and Balance Sheet management. David is a Managing Partner of XM International Associates Ltd which provides consultancy advice to a diverse group of financial services organisations worldwide. He also has Directorships in companies in the property and asset management-related fields.

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BOARD OF DIRECTORS (continued)

Raymond Abbott is a chartered accountant by profession and has worked in private equity and investment for over twenty years. As the former managing director of Alliance Trust Equity Partners he was responsible for strategic development. Previously he founded the UK venture investor Albany Ventures and prior to that was Director of Investment at British Linen Bank. Raymond also serves as a non-executive director of Foresight 4 plc, Galleria Holdings Limited and Essex Services Group plc. He therefore brings a wealth of financial experience to the Board, having been appointed in June 2013.

Jack Ogston is a Fellow of the Chartered Institute of Bankers in Scotland, having spent 36 years in management positions with Clydesdale Bank, latterly as Head of Corporate & Structured Finance in Scotland. He has significant board and lending experience and is currently an advisor to Davidson Chalmers Solicitors, Maven Capital Partners and Kingdom Taverns. Jack was appointed to the Board in July 2013.

Mark Thomson was appointed as Chief Executive on 1 May 2013, having joined the Society in April 2012 in the role of Chief Operating Officer and been appointed to the Board in October 2012. He is a Fellow of the Chartered Institute of Bankers in Scotland and a Chartered Banker. During his 30-year career Mark has worked in a variety of roles in retail banking, including 16 years at Scottish Widows Bank, where his responsibilities included credit risk management and compliance, as well as a wide range of operational activities. Mark was appointed to the Board of Scottish Widows Bank in January 2006 as Credit Director – a position he held until joining the Society.

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SUMMARY CORPORATE GOVERNANCE REPORT for the year ended 31 January 2014

The Board of Directors is responsible for the governance of the Society, on behalf of the members, and is committed to good practice in Corporate Governance. The Financial Reporting Council issued the latest version of the UK Corporate Governance Code for listed companies ('the Code') in September 2012 and, although the Code does not directly apply to mutual organisations, the Board has regard to its principles as outlined in the report below, in accordance with the expectation of the regulators.

A more detailed Corporate Governance report is provided in the Society's Report & Accounts.

The Role of the Board The principal functions of the Board are to set the Society’s strategy, to ensure that the necessary financial and human resources are in place for the Society to meet its objectives, and to review management performance.

The full Board normally meets on a monthly basis with additional meetings as required. In 2013-14 there were twelve Board meetings and a specific meeting to consider strategy and the Corporate Plan.

There is a schedule of matters reserved for Board decision and the Board has delegated certain responsibilities to the committees described below, all of which report to the Board. Minutes of each committee’s meetings are distributed to all Board members and the Chairman of each committee provides a report at the Board meeting following any meeting of that committee. The terms of reference for all committees are available on the Society’s website.

Audit Committee: This Committee met on six occasions during the year and is chaired by an independent Director. Executive Directors, other members of management and internal and external auditors attend by invitation only. The Committee considers regulatory compliance matters and adequacy of internal controls. It also reviews audit reports, monitors the effectiveness of the internal audit function and agrees the annual internal audit plan. It considers and recommends to the Board (for approval by the members) the appointment or re-appointment of the external Auditors, and the policy on the engagement of the external Auditors for non-audit services and approval of their fees. The Committee also monitors the external auditors' independence, objectivity, competence and effectiveness. It also ensures that the systems of accounting, business control and management of information are adequate for the Society's needs. At least annually the Committee meets with the external auditors without the Executive Directors being present. As required by the Code, Committee provides advice to the Board confirming that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for members to assess the Society’s performance, business model and strategy. The Committee comprises three Non-Executive Directors who all have relevant financial experience. Moira Sibbald chairs the Committee, with members during the year being Robert Golbourn, David Chalmers (until 28 May 2013) and Raymond Abbott (from 26 June 2013). The Society Chairman and members of senior management attend by invitation, together with representatives from the internal and external auditors.

Assets & Liabilities Committee (ALCO): This Committee held ten meetings during the year and its remit includes monitoring capital and liquidity, balance sheet structure, financial risk management, pricing of new and existing products, and monitoring of treasury activities – including counterparties, interest rate risk and basis risk. The Committee comprises three Non-Executive Directors, together with the Chief Executive and Head of Finance. The Committee is chaired by David Peebles and Non-Executive members during the year were Alexa Henderson, David Chalmers (until 28 May 2013) and Raymond Abbott (from 26 June 2013). Other members of senior management and the Finance team attend by invitation.

Credit Committee: This Committee provides Board oversight of credit risk, under the chairmanship of Robert Golbourn. Membership consists of two Non-Executive Directors, currently David Peebles and Jack Ogston, and the Chief Executive, and meetings are attended by the Head of Operations & Lending together with other relevant staff as necessary. The Committee held ten meetings during the year and its remit includes reviewing lending policies, monitoring of mortgage market conditions from a credit risk perspective, reviewing the credit quality and risk profile of the mortgage book, assessing credit risks associated with new and existing mortgage products, overviewing lending decisions, monitoring arrears and reviewing specific and general loss provisions. Any recommendations for changes to policies etc are referred to the Board for approval.

Nomination & Remuneration Committee: This Committee reviews Board constitution, skills, performance, succession plans and Director elections and is responsible for remuneration policy for all Directors and for making recommendations to the Board regarding general remuneration and contractual arrangements. It also supervises the process for appointment of new Directors. The Committee comprises all Non-Executive Directors and is chaired by the Senior Independent Director (George Clark until 28 May 2013 and Robert Golbourn thereafter). The Chief Executive attends by invitation but takes no part in any discussion of his own remuneration. There were three meetings during the year.

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SUMMARY CORPORATE GOVERNANCE REPORT for the year ended 31 January 2014

Conduct Risk Committee: This Committee has been established by the Board to provide assurance that members (or potential members) are being treated fairly and consistently and that Conduct Risks are being appropriately managed by monitoring performance against the Society’s Conduct Risk Appetite. The Committee is chaired by the Chief Executive, and consists of one Non-Executive Director (Alexa Henderson), the Head of Operations & Lending and the Secretary & Head of Compliance. Other members of the management team attend as required. The Committee met for the first time in January 2014.

The Composition of the Board The Board currently consists of six Non-Executive and one Executive Director, providing a balance of skills and experience appropriate for the requirements of the business. The Board is satisfied that in terms of independence of character, judgement and robustness of challenge to the Society’s Management, each Non-Executive Director is considered independent. Factors taken into account when assessing independence include length of service, material business relationships and whether the Director has recently been an employee of the Society. The membership of committees is reviewed annually.

Commitment The Nomination & Remuneration Committee evaluates the ability of Non-Executive Directors to commit the time required for their role, prior to appointment. The letter of appointment sets out the expected time commitment and Directors undertake that they have sufficient time to meet those expectations. The formal appraisal process carried out by the Chairman each year also assesses whether Directors have demonstrated this ability during the year.

The attendance record of Board and Committee members during the year is set out below. This table does not reflect Directors' attendance at additional meetings, seminars, conferences and courses during the year or time spent on preparation for meetings etc. Generally each Non-Executive Director spends a minimum of 2-3 days each month on Society business and the Chairman's time commitment is considerably more.

Directors’ Attendance 2013-14 The table below shows the number of formal Board meetings attended by each Director and, in relation to Committees, the number of meetings and attendance by individuals as members of those Committees. The figures in brackets denote the number of meetings each Director was eligible to attend.

Board Audit Committee

Assets & Liabilities

Committee

Credit Committee

Nomination & Remuneration

Committee

Conduct Risk

Committee

R J Abbott 8(8) 3(3) 5(5) - 2(2) -

D W P Chalmers 5(5) 2(2) 5(5) - 1(1) -

G B Clark 5(5) - - - 1(1) -

R Golbourn 13(13) 6(6) - 10(10) 3(3) -

A H Henderson 13(13) - 10(10) 1(1) 3(3) 1(1)

J C Ogston 6(7) - - 5(5) 1(2) -

D Peebles 12(13) - 10(10) 6(10) 3(3) -

M R Sibbald 12(13) 6(6) - - 3(3) -

G J Kay 1(3) - 1(2) 2(3) - -

M L Thomson 13(13) - 10(10) 7(7) - 1(1)

Re-election The Society’s Rules require that Directors are submitted for election at the Annual General Meeting (AGM) following their appointment to the Board. All Directors are required by the Society's Rules to seek re-election if they have not been elected at either of the two previous AGMs. Directors may also submit themselves for re-election voluntarily. The UK Corporate Governance Code specifies that any Director serving for longer than nine years should be subject to annual re-election by the members. The Board considers that annual re-election is not appropriate for the Society, as compliance with the requirements under the Society's Rules has tended to mean Directors standing for re-election every two years.

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PROPOSED ALTERATIONS TO THE RULES

The agenda for this year’s Annual General Meeting (AGM) includes a resolution to amend the Rules of the Society and the purpose of this note is to provide an explanation to members of the substance of the alterations.

Background The Society’s Rules were comprehensively reviewed and updated in 2012 following publication by the Building Societies Association (BSA) of a new (Sixth) edition of its Model Rules, on which the Rules are based. At that time, negotiations were ongoing at European level regarding new capital requirements for financial institutions and the types of capital instrument which might be available to mutual organisations.

Like other building societies and banks, Scottish Building Society is required to maintain capital (known as ‘Core Tier 1 Capital’) as protection against losses which may arise in a difficult financial environment. Regulatory changes in the UK and Europe mean that financial institutions are required to hold more Core Tier 1 Capital (or ‘Common Equity Tier 1 Capital’, as it is referred to under the new European regulations) than was previously the case.

The Society’s capital has to date consisted entirely of retained profits built up over its 165 years of existence. Whilst at the present time the Society holds more than sufficient capital to meet current and expected regulatory requirements, the Board considers that it would be prudent to adopt the necessary powers now to ensure that the Society will have access to the new forms of qualifying capital instrument available to building societies under the new European regulations, including ‘Core Capital Deferred Shares’ (CCDS), which will count as Common Equity Tier 1 Capital, and other forms of supplementary capital.

The alterations to Rules as proposed are designed to enable the Society to issue capital instruments of this nature, should the Board believe it is in the interests of members to do so. They also mean that our Rules will continue to reflect very closely the wording of the BSA Model Rules, in line with best practice and the expectations of the regulators.

Summary of key changes • Insertion of additional definitions within Rule 1 (Interpretation);

• Amendments to various Rules which refer to ‘shares’ to incorporate reference to ‘deferred shares’ as necessary, including giving membership rights to holders of deferred shares;

• Amendments to existing Rules (and insertion of two new Rules) to cover the administrative requirements associated with deferred shares, including the maintenance of a separate Deferred Shares Register.

Effective date of changes It is intended that, if the alterations to the Rules are approved by members at the AGM, they will take effect, subject to formal registration by the Financial Conduct Authority (FCA), on 1 September 2014.

Further information A full copy of the document setting out all the proposed amendments, the existing Rules with the alterations highlighted, and a copy of the Rules including all the changes proposed are all available on the Society's website (www.scottishbs.co.uk). Members may also obtain paper copies of these documents on request from the Secretary, Scottish Building Society, SBS House, 193 Dalry Road, Edinburgh EH11 2EF.

The Board believes that these alterations are in the interests of the Society and its members, as they will give the Society the updated powers it needs regarding capital instruments.

The Board therefore recommends that members vote FOR these alterations.

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SOCIETY LOCATIONS

Head Office SBS House, 193 Dalry Road, Edinburgh EH11 2EF mail@scottishbs.co.uk 0131 313 7700 Chief Executive Mark Thomson FCIBS Secretary & Head of Compliance Andrew J W Tristram BA FCIBS ACIS Head of Finance Graeme Chandler BA FCMA Head of Operations & Lending Andrew Moses BA Head of Sales & Marketing John H Lloyd MCIBS Head of Human Resources Emily Dixon BA MA MCIPD Head of IT Alison I Quilter FASA FASM

Area Offices Edinburgh & East SBS House, 193 Dalry Road, Edinburgh EH11 2EF 0131 313 7755 Glasgow & West 18 Waterloo Street, Glasgow G2 6DB 0141 248 6111 Highlands & Islands 71 Queensgate, Inverness IV1 1DG 01463 234423 Borders 48 Bank Street, Galashiels TD1 1EP 01896 753682 South West 27 Ayr Street, Troon KA10 6EB 01292 315506 North East 18 Victoria Street, Aberdeen AB10 1XA 01224 622900

Agency Offices Aberdeen Wilsone & Duffus 75 Victoria Street, Dyce AB21 7AX 01224 797979 Alexandria Stirling & Gilmour 24 Gilmour Street G83 0DB 01389 752641 Alloa Russel & Aitken 8 Shillinghill FK10 1JT 01259 723201 Arbroath Connelly & Yeoman 78 High Street DD11 1HL 01241 434200 Armadale Sneddon & Son SSC 47-49 West Main Street EH48 3PZ 01501 733200 Auchterarder Dickson Middleton & Co 169 High Street PH3 1AD 01764 663835 Ayr Wallace Hodge & Co 6 Killoch Place KA7 2EA 01292 611177 Bearsden Campbell Dallas Fin Services Tribune Court, 2 Roman Road G61 2SW 0141 942 6060 Bishopbriggs Macfarlane & Co 4 Kenmure Avenue G64 2RE 0141 772 6063 Blairgowrie A & R Robertson & Black WS Bank Street PH10 6DE 01250 872043 Carnoustie Connelly & Yeoman 31 High Street DD7 6AG 01241 859500 Colinton Allingham & Co 9-15 Bridge Road, Colinton, Edinburgh EH13 0LQ 0131 447 9341 Crieff Graham & Finlayson 29 Comrie Street PH7 4BD 01764 652224 Cumnock R D Hunter & Co 1 The Square KA18 1BQ 01290 421185 Dalbeattie Austins 52 High Street DG5 4AB 01556 610259 Dumbarton Leven Insurance Brokers Ltd 31 Glasgow Road G82 1RB 01389 767800 Dumfries Walker & Sharpe 37 George Street DG1 1EB 01387 267222 Dunbar Brooke & Brown WS 116 High Street EH42 1JJ 01368 862746 Dunblane Marshall MacCallum 1-3 High Street FK15 0EE 01786 822235 Dundee Lindsays 5 Bank Street DD1 1RL 01382 224112 Dunoon Stewart & Bennett 82 Argyll Street PA23 7NE 01369 702885 Duns J D Clark & Allan WS Tolbooth House, Market Square TD11 3DR 01361 882501 Edinburgh Helen Lowe & Co 17-21 East Mayfield EH9 1SE 0131 668 4111 Elgin Grigor & Young 1 North Street IV30 1UA 01343 544077 Eyemouth Melrose & Porteous 1 Manse Road TD14 5JE 01890 751557 Forfar Grampian Insurance Services Ltd 48 West High Street DD8 1BA 01307 464888 Forres R & R Urquhart 117-121 High Street IV36 1AB 01309 672216 Fraserburgh Stewart & Watson 38 Broad Street AB43 9AH 01346 514443

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Girvan Murray & Tait 146 Dalrymple Street KA26 9BQ 01465 713118 Gourock Neill Clerk & Murray 4 Bath Street PA19 1PA 01475 631266 Hawick Haddon & Turnbull WS 55 High Street TD9 9BP 01450 372336 Huntly Peterkins 3 The Square AB54 8AE 01466 792101 Inverurie The Kellas Partnership 2-6 High Street AB51 3XQ 01467 627300 Jedburgh Lindsays 26 High Street TD8 6AE 01835 862391 Keith Stephen & Robb 157 Mid Street AB55 5BJ 01542 887405 Kelso Paterson Reid CA 47-51 Horsemarket TD5 7AA 01573 225242 Kelso Stormonth Darling WS Bank of Scotland Buildings, The Square TD5 7HQ 01573 224143 Kilmarnock Mackintosh & Wylie 23 The Foregate KA1 1LE 01563 525104 Kingussie Robertson & Co 64 High Street PH21 1HZ 01540 661220 Kirkcudbright Williamson & Henry 3 St Cuthbert Street DG6 4DJ 01557 331049 Kirkwall Orkney Financial & Property Centre Ltd 13 Bridge Street KW15 1HR 01856 877866 Largs Mactaggart & Co 75 Main Street KA30 8AJ 01475 674628 Lenzie Miller Beckett & Jackson 1 Alexandra Avenue G66 5BE 0141 776 7761 Leven Smith & Grant Rathellan, High Street KY8 4PR 01333 423441 Linlithgow Money Check 1a Provost Road EH49 7JF 01506 848900 Lockerbie Henderson & Mackay Victoria Square DG11 2JP 01576 202137 Musselburgh Alex Mitchell & Sons 21 Eskside West EH21 6PW 0131 665 2468 Nairn Donaldson & Henderson 75-77 High Street IV12 4BW 01667 453395 Newmilns Mair Matheson 53-55 Main Street KA16 9DA 01560 321225 Newton Stewart The Hansen Company 29 Queen Street DG8 6JR 01671 402341 North Berwick Paris Steele WS 35 Westgate EH39 4AG 01620 892138 Peebles Charles Gray & Co 1st Floor, 6 School Brae Business Centre EH45 8AT 01721 723366 Perth McCash & Hunter 25 South Methven Street PH1 5ES 01738 620451 Peterhead Bain Henry Reid 28 Broad Street AB42 1BY 01779 476384 Portree Skye Property Centre Macdonald House, Somerled Square IV51 9EH 01478 611600 Renfrew Walker Laird 10 Canal Street PA4 8QD 0141 886 2152 Rothesay Bute Factors Ltd 53 Victoria Street PA20 0AP 01700 503055 Saltcoats Nellany & Co 35-37 Chapelwell Street KA21 5EB 01294 464175 Selkirk Douglas Gilmour & Son 20 Market Place TD7 4BL 01750 20271 Stornoway Mann Judd Gordon CA 26 Lewis Street HS1 2JF 01851 702335 Strathaven Gebbie & Wilson 18 Common Green, Strathaven ML10 6AG 01357 520082 Thornhill Farries Kirk & McVean 38 Drumlanrig Street DG3 5LJ 01848 330850 Turriff Stewart & Watson 59 High Street AB53 4EL 01888 563773 Turriff Youngson Insurance Consultants 3 Main Street AB53 4AA 01888 562689 Wick FWG Financial Services (Northern) Ltd Market Place KW1 4LP 01955 602405

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Head Office: SBS House, 193 Dalry Road, Edinburgh EH11 2EF.

Scottish Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority (Register No 206034). Branches and local offices throughout Scotland. Member of the Building Societies Association.